COMMERCIAL TAXES OFFICER AJMER Vs. M H SHAH AND CO

JUDGEMENT

(1.) THESE two applications have been filed by the Commercial Taxes Officer, Ajmer, under section 15 (3a) of the Rajasthan Sales Tax Act, 1954 (hereinafter called the Act) praying that this court may direct the Board of Revenue for Rajasthan to state the case and refer it to this court. In both these applications, the respondent is the firm Messrs. M. H. Shah & Co. , which was appointed as railway auctioneer under the terms and conditions mentioned in the agreement exhibit 1 dated 7th April, 1962, for auctioning the coal ashes of the Union of India pertaining to the Western Railway. The respondent was assessed to sales tax for the accounting years 1962-63 and 1063-64 by two separate assessment orders. But later on proceedings were taken against the respondent under section 12 of the Act by issuing notices to it to show cause why it should not be reassessed and it was reassessed on 10th September, 1965, by the Commercial Taxes Officer, Ajmer. Two separate appeals were filed by the respondent to the Deputy Commissioner (Appeals), Ajmer. They were dismissed on 19th May, 1966. Two separate revision applications were filed by the respondents to the Board of Revenue for Rajasthan and the Board of Revenue has taken the view that the respondent was not a dealer within the definition of section 2 of the Act and taking this view, it set aside the orders of reassessment on 28th April, 1967. The Commercial Taxes Officer, Ajmer, had, therefore, filed these two applications under section 15 (3a) as after having filed the applications under section 15 (1) before the Board of Revenue, the Board failed to dispose of that applications within the prescribed time of 120 days. The sole question in these two cases is whether the respondent falls within the definition of dealer as defined under section 2 (f) of the Act. Learned Additional Advocate-General has urged on behalf of the petitioner that an auctioneer is included within the definition of dealer under section 2 (f) (ii) and as such the respondent is liable to pay sales tax. The relevant part of the definition of dealer is quoted below : " 'dealer'. . . . . . . . . . . . . includes (iii) an auctioneer. . . . . . . . . . who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal. "

(2.) IT is to be examined in these two cases whether the respondent caries on the business of selling coal ash on behalf of the railway administration. We have examined the agreement exhibit 1 dated 7th April, 1962, by which the President, on behalf of the Union of India as the executive authority of the administration of Western Railway, had appointed the respondent as an auctioneer. IT is provided in the agreement that the auctioneer shall conduct sales by public auction at all places of the Western Railway for a period of one year of coal ashes belonging to the administration which they may be entrusted with from time to time by the Chief Engineer of the administration at Bombay for disposal by auction. Under the agreement, it is the Chief Engineer who will determine the conditions of sale and the place and time, where and when the sales are to be held. The Chief Engineer is also to determine the period of delivery within which the coal ashes will be removed from the railway premises and such other particulars as the Chief Engineer may deem necessary. The auctioneers are to auction all coal ashes in convenient lots, but the argument of the lots is to rest with the administration and the auctioneers are prohibited from purchasing any of the lots themselves or through their agents without the prior consent of the administration. IT is therein provided that a railway officer, as may be authorised in this behalf, shall be present at the auction sale to supervise them in lots. The auctioneers are to collect the earnest money on the fall of hammer for each accepted bid and credit it to the administration. The bids are subject to subsequent acceptance by the Chief Engineer/divisional Superintendent. The balance of the purchase price is to be paid by the purchaser within five working days of the sale or the intimation to him that the Chief Engineer/divisional Superintendent has accepted the bid, to the Chief Cashier, Western Railway, and the auctioneers, after satisfying themselves fully about the receipt are to hand over the delivery order to the purchase to enable him to take delivery of the coal ashes. The auctioneers are entitled to be paid commission on the gross proceeds of completed sales as specified in the schedule annexed to the agreement.